Case Information
ILL U NITED S TATES D ISTRICT C OURT F OR T HE N ORTHERN D ISTRICT OF I LLINOIS E ASTERN D IVISION
CITY OF CHICAGO, Plaintiff, No. 24-cv-02496 Judge Franklin U. Valderrama v. BP P.L.C., et al. ,
Defendants.
M EMORANDUM O PINION AND O RDER
Climate change and its causes is one of the most divisive issues of our time. For some, the burning of fossil fuels is the primary cause of climate change. Municipalities in recent years have sought to hold fossil fuel companies liable for the costs associated with climate change. In this case, the City of Chicago (the City) sued oil companies BP P.L.C., BP America Inc., BP Products North America Inc., Chevron Corporation, Chevron U.S.A. Inc., ConocoPhillips Company, ConocoPhillips, Phillips 66 Company, Phillips 66, Exxon Mobil Corporation, ExxonMobil Oil Corporation, Shell Oil Products Company LLC, Shell PLC, Shell USA, Inc., and their primary trade organization, the American Petroleum Institute (collectively Defendants) in state court, alleging that they misrepresented and concealed information about their fossil fuel products in violation of numerous state laws and various state common laws. See generally R. 1-1, Compl. [1] Defendants removed the case to this Court pursuant to 28 U.S.C. § 1442, 28 U.S.C. §§ 1331 and 1441(a). R. 1, NOR. The City moves to remand the case to state court. R. 66, Mot. Remand. For the reasons that follow, the Court grants the City’s motion to remand.
Background [2]
The City alleges that, for decades the fossil fuel industry has misled consumers and the public about climate change. Compl. ¶ 1. Major members of the fossil industry have known for decades that fossil fuels are the primary cause of climate change. Id. ¶ 2. The fossil fuel industry knew that, if unabated, climate change could result in catastrophic impacts, including droughts, floods, and severe weather events that would impose enormous harms on cities such as Chicago. Id. Rather than warn of these harms, Defendants “mounted a disinformation campaign beginning as early as the 1970s to discredit the burgeoning scientific consensus on climate change . . . .” Id. ¶ 6. Defendants “misrepresented and concealed the hazards of fossil fuel products to deceive consumers and the public about the consequences of everyday use of fossil fuel products . . . while knowing the dangers associated with them.” ¶ 9. Defendants’ conduct “drove fossil fuel consumption and delayed the transition to a lower-carbon future.” Id . This caused, from the City’s perspective, “an enormous, foreseeable, and avoidable increase in anthropogenic GHG emissions and accelerated global warming, bringing devastating consequences to the City and its people.” Id . The City sued Defendants in state court asserting causes of action against all Defendants for: strict products liability, failure to warn (Count I); negligent products liability, failure to warn (Count II); negligence (Count III); public nuisance (Count IV); private nuisance (Count V); nuisance violations of MCC § 7-28-030 (Count VI); civil conspiracy (Count VII); unjust enrichment (Count VIII); consumer fraud in violation of MCC § 2-25-090 (count IX); misrepresentations in connection with sale or advertisement of merchandise in violation of MCC §§ 4-276-470, et seq. (Count X); and recovery of City costs in violation of MCC § 1-20-020 (Count XI). Compl. Defendants removed the case to this Court based upon 28 U.S.C. §§ 1331, 1441(a), and 1442. NOR. The City moves to remand the case back to state court, arguing that the Court lacks subject matter jurisdiction. The Court agrees.
Legal Standard
Federal courts are courts of limited jurisdiction.
Exxon Mobil Corp. v.
Allapatthah Servs., Inc.
, 545 U.S. 546, 552 (2005). A case may only be brought in
federal court when such a cause of action arises under a federal question, 28 U.S.C.
§ 1331, or where there is diversity of citizenship and an amount-in-controversy
exceeding $75,000,
id
. § 1332(a);
see Home Depot U.S.A., Inc. v. Jackson
, 587 U.S.
435, 437–38 (2019). A defendant may remove to federal court any action filed in state
court that “could have been brought originally in federal court.” 28 U.S.C. § 1441(a);
Tylka v. Gerber Prods. Co.
, 211 F.3d 445, 448 (7th Cir. 2000). “The party seeking
removal has the burden of establishing federal jurisdiction.”
Schur v. L.A. Weight
Loss Ctrs., Inc.
, 577 F.3d 752, 758 (7th Cir. 2009). “Courts should interpret the
removal statute narrowly and presume that the plaintiff may choose his or her
forum.”
Doe v. Allied–Signal, Inc.
,
Analysis
Defendants assert that the Court has subject matter jurisdiction pursuant to
the federal officer removal statute, 28 U.S.C. § 1442(a)(1) and federal common law.
However, the City argues, and the Court agrees, that Defendants have abandoned
their contention that the Court has jurisdiction based on federal common law, as this
argument is relegated to a footnote in their response.
[3]
See
R. 87, Resp. at 2–3 n.2.
Evergreen Square of Cudahy v. Wisconsin Hous. & Econ. Dev. Auth
.,
The City argues that the case should be remanded to state court because Defendants do not satisfy the elements of the federal officer removal statute. Specifically, the City advances four arguments for remand: (1) the City does not seek any relief for injuries arising from Defendants’ supplying specialized fuels to the federal government for military and national defense purposes; (2) Defendants were not acting under the direction or control of federal officers during any of the activities Defendants cite as grounds for removal; (3) the City does not seek to hold Defendants liable for any act that Defendants allegedly took at the behest of a federal officer; and (4) Defendants have not pled a colorable federal defense. R. 66-1, Memo. Remand at 5–6. The City points out that eight courts of appeals have rejected Defendants’ removal attempts in similar cases. at 1.
Predictably, Defendants disagree, arguing that they have satisfied each
element of the federal officer removal statute. Resp. According to Defendants, it
matters not that other circuits have remanded similar cases based on similar
arguments, since Seventh Circuit authority, and specifically
Baker v. Atl. Richfield
Co.
,
In
Baker,
the plaintiffs, former residents of a housing complex, sued in state
court several companies that manufactured industrial materials at a refinery that
previously stood on the same land as the complex. The plaintiffs alleged that the
defendants polluted the soil in and around their housing complex, exposing plaintiffs
to hazardous substances like lead and arsenic. 962 F.3d at 939. The defendants
removed the case to federal court under the federal officer removal statute, on the
basis that the government directed the defendants or their predecessors to produce
certain materials for the military, supervised the distribution of these goods, and
controlled their ultimate usages.
The Seventh Circuit reversed. The court explained that “where a private
contractor helps the Government to produce an item that it needs, the assistance that
private contractors provide federal officers goes beyond simple compliance with the
law and helps officers fulfill other basic governmental tasks.”
Baker
,
The court then turned to whether the conduct alleged in the complaint related to “acts for or relating to” federal authority. That is, whether there was a causal connection between the charged conduct and asserted federal authority. , 962 F.3d at 943. The court rejected the plaintiffs’ contention that the defendants failed to show that their injuries were caused by the defendants’ wartime production for the government because the plaintiffs mistakenly were demanding “an airtight case on the merits in order to show the required causal connection.” Id . The court reminded that Supreme Court “jurisprudence teaches that the policy in favor of federal officer removal should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1).” Id . (cleaned up). The court found that Congress, in amending the federal officer removal statute in 2011, “broadened federal officer removal to actions, not just causally connected, but alternatively connected or associated , with acts under color of federal office.” Id. (emphases in original) (cleaned up). Accordingly, the Seventh Circuit abandoned the “causal connection” test and “join[ed] all the courts of appeals that have replaced causation with connection and expressly adopt[ed] that standard as [its] own.” Id . at 944. When viewed under that lens, the defendants did not need to allege that the complained-of-conduct itself was at the behest of a federal agency. It is enough for the “acting under” test that the allegations are directed at the relationship between the defendant and the federal government. Id . at 945. The court concluded that the parties’ dispute over whether the plaintiffs’ injuries arose from products the defendants manufactured for the government was a causation question that federal courts can resolve. Id .
Keeping Baker in mind, the Court addresses each of the City’s arguments below.
I. Disclaimer of Injuries
As a preliminary matter, the City argues that “[m]any of Defendants’ removal arguments are irrelevant because the Complaint expressly ‘disclaims injuries . . . arising from Defendants’ provision of non-commercial, specialized fossil fuel products to the federal government for military and national defense purposes.’” Memo. Remand at 6 (quoting Compl. ¶ 11). That is, the Complaint, from the City’s point of view, does not place Defendants’ sales of specialized military fuels at issue. Id . Courts, asserts the City, grant motions to remand where the plaintiff expressly disclaims the claims upon which the federal officer removal was based. Id . (citing, inter alia , Kelleher v. A.W. Chesterton Co. , 2015 WL 7422756, at *2 (S.D. Ill. Nov. 23, 2015); Reinbold v. Advanced Auto Parts, Inc. , 2018 WL 3036026, at *2 (S.D. Ill. June 19, 2018)).
Defendants counter that the City’s disclaimer of injuries argument is
foreclosed by
Baker
. Resp. at 27. As for
Kelleher
and
Reinbold
, those cases, from
Defendants’ perspective, are distinguishable as they pre-date
Baker
.
Id.
at 28. And,
in a notice of supplemental authority, Defendants point to a more recent Seventh
Circuit case,
People ex rel. Raoul v. 3M Co.
,
In Baker , in a footnote, the Seventh Circuit addressed and rejected the plaintiffs’ purported disclaimer as it contradicted their theory of liability. 962 F.3d at 945 n.3. The plaintiffs purported to disclaim that their lawsuit was about one of the defendant’s manufacture of Freon-12 for the government, but because the defendant alleged that its Freon-12 production resulted in waste streams containing lead and arsenic waste, two of the main toxins the plaintiffs claimed harmed them, the court found that the plaintiffs “could not have it both ways.” Put another way, the Seventh Circuit did not allow the plaintiffs to seek damages for certain types of pollution, while simultaneously disclaiming those same types of pollution for jurisdictional purposes.
In 3M , like , the plaintiffs alleged violations of several Illinois environmental statutes, as well as common law claims, against a company that produces numerous chemical products in its manufacturing operations. 111 F.4th at 849. The plaintiffs’ suit was not premised on any misrepresentations made by the company. The Seventh Circuit agreed with the district court that the plaintiffs’ disclaimer—that it would not seek relief against the company for mixed contamination, that is, contamination arising from private and government- contracted conduct—brought the disclaimer outside the scope of the disclaimer in Baker , and prevented the defendant from raising a colorable federal contractor defense. Id. The plaintiff in Express Scripts alleged that defendants “schemed to unlawfully inflate insulin prices through rebate negotiations and price setting.” 119 F.4th at 179. Similar to the plaintiffs in 3M , the plaintiff sought to evade federal jurisdiction by disclaiming any “relief relating to any federal program . . . or any contract related to a federal program.” Id. at 189. However, the First Circuit found that it was impossible to divide the defendant’s negotiations over rebates and prices over insulin between “federal and non-federal work to enforce the disclaimer,” and thus, crediting the defendant’s theory of the case, the disclaimer did not foreclose colorable federal defenses. at 192–93.
Here, the City states in its Complaint that it “hereby disclaims injuries arising
on federal property and those arising from Defendants’ provisions of non-commercial,
specialized fossil fuel products to the federal government for military and national
defense purposes. [The City] seeks no recovery or relief attributable to these injuries.”
Compl. ¶ 11 n.6. The Court agrees with the City that neither ,
3M
, nor
Express
Scripts
render the City’s disclaimer ineffective. R. 93, Reply at 5–6; R. 99, Pl. Resp.
Suppl. Auth. Unlike in
Baker
, where, as discussed above, there was a contradiction
between the plaintiffs’ attempt to both recover from lead and arsenic contamination
but also disclaim government-controlled production of some of that contamination,
here, there is no contradiction between the City’s disclaimer and its deception-focused
theory of liability. Reply at 5. Indeed, as counsel for the City acknowledged during
oral argument, the City’s disclaimer, to an extent, is “redundant” because the causes
of action brought by the City do not go to the conduct carved out in the disclaimer. As
the Third Circuit stated in
City of Hoboken v. Chevron Corp
. about a materially
identical disclaimer, “the disclaimers are no ruse . . . [the plaintiffs] carve out a small
island that would needlessly complicate their cases.”
Finally, Defendants are correct that the Court must credit a defendant’s
“reasonable” theory of the case. ,
Even if Defendants were correct that the City’s disclaimer is invalid, however, the Court nonetheless agrees with the City that they fail to satisfy other requirements of federal officer removal, as discussed below.
II. Federal Officer Elements
Briefly, as stated above, federal officer removal is proper “when the defendant
(1) is a person within the meaning of the statute, (2) is acting under the United States,
its agencies, or its officers, (3) is acting under color of federal authority, and (4) has a
colorable federal defense.” ,
A. Acting Under Federal Officers
The second element, the “acting under” requirement, looks to the relationship
between the defendant seeking to remove the case and the United States, its agencies,
or its officers.
Roberts v. Smith & Wesson Brands, Inc.
,
First, Defendants contend that they acted under federal officers by repeatedly
performing critical and necessary functions for the U.S. military to further national
defense. NOR ¶ 22. More specifically, that they acted under federal officers when they
produced aviation fuel gas or “avgas” and operated petroleum infrastructure,
particularly during World War II and the Korean War. ¶¶ 29, 31. Second,
Defendants maintain that they “continue to produce and supply large quantities of
highly specialized fuels that are required to conform to exact DOD specifications” to
the military to this day. Resp. at 12; NOR ¶¶ 45–55. Third, Defendants contend that
removal is appropriate because of the role of Standard Oil of California, a Chevron
predecessor, in operating Elk Hills Reserve in California. NOR ¶ 59. The Elk Hills
Reserve was a petroleum reserve created in 1912 intended to preserve oil in the
ground for national emergencies.
Id.
¶ 58. Standard Oil, note Defendants, operated
the U.S. Navy’s portion of the oil reserve according to an Operating Agreement which
specified that Standard Oil was “
in the employ of the Navy Department
and [was]
responsible to the Secretary thereof.”
Id
. ¶ 70 (emphasis in NOR). Standard Oil, insist
Defendants, operated Elk Hills under the “subjection, guidance, or control” of the
Navy.
Id.
¶ 72 (quoting
Watson
,
Fourth, Defendants assert that they acted under federal officers “by producing oil and gas pursuant to the federal mineral exploitation and production regime created by the Outer Continental Shelf Lands Act.” NOR ¶¶ 82–109. The federal government, according to Defendants, “retained the power to direct how oil and gas resources would be extracted and sold from the [Outer Continental Shelf (OCS)].” Id. ¶ 82. Fifth, and finally, in response to the 1970’s oil embargoes, Congress created the Strategic Petroleum Reserve to reduce the impact of disruptions in supplies of petroleum products. Id. ¶ 117. Defendants insist that they acted under federal officers by supplying federally owned oil for gas and managing the Strategic Petroleum Reserve for the government. ¶¶ 119–20. The federal government, assert Defendants, required certain Defendants or their predecessors to pay royalties in kind, which the government used for its strategic stockpile. ¶ 120.
The City takes issue with each of Defendants’ activities for which they claim they acted under federal authority, raising four primary arguments that pertain to some or all of the activities. The Court addresses each in turn.
As an initial matter, the City contends—and the Court agrees, as explained
above—that the City’s disclaimer excludes injuries caused by Defendants’ production
of avgas during World War II and the Korean War, as well as sales of specialized,
non-commercial fuels to the military at any time. Memo. Remand at 6–8; Reply at 5.
So too with Defendants’ interactions with the Strategic Petroleum Reserve. Memo.
Remand at 13 (citing
Hoboken
,
The City also argues that none of the above-listed activities demonstrate
federal control because they were not closely controlled by the government, but rather
demonstrate “the story of a narrow business relationship,” and which other courts,
including several appellate courts, have found to be insufficient to show the requisite
“subjection, guidance, or control” required for the “acting under” element. Memo.
Remand at 11–12; Reply at 14–15 (citing,
inter alia
,
Mayor & City Council of
Baltimore v. BP P.L.C
.,
Defendants retort that under
Baker
, their activities satisfy the acting-under
standard. That is, Defendants’ fuel production and sales activities were done
according to “detailed specifications,” under federal “compulsion,” and subject to
“continuous federal supervision”—which, Defendants argue, suffices to meet the
acting-under standard under
Baker
. Resp. at 6–7 (quoting
Baker
,
The City’s reliance on out-of-Circuit cases is insufficient on this point, as the
Court agrees with Defendants that the Seventh Circuit adopted a broader
interpretation of the “acting under” standard in
Baker
than other Circuits have
applied. For example, the Fourth Circuit in
Mayor & City Council of Baltimore v. BP
P.L.C.
, rejected the defendants’ argument that they acted under federal officials when
it “helped the Government to produce an item that it needs” by selling fuel for resale
on Navy bases, as “such logic would bring every seller of contracted goods and services
within the ambit of § 1442 when the government is a customer.” 31 F.4th at 230
(citing
Watson
,
No matter, because the Court agrees with the City that, not only does the
disclaimer foreclose the above argument, but also the timing of certain activities and
the relationship of the activities to the crux of the City’s claims do not support a
finding that Defendants were acting under a federal official. Specifically, the City
argues that Defendants’ activities during World War II and the Korean War cannot
justify federal officer removal because Defendants’ activities during those wars
predate the deceptive conduct alleged in the Complaint. Memo. Remand at 14 (citing
Anne Arundel
,
The City correctly points out that several circuit courts have rejected similar arguments—and declarations cited in support—raised by Defendants. See Reply at 10. As the United States Court of Appeals for the District of Columbia recently noted in a similar case:
But the District does not allege the Companies acted unlawfully until the late 1980s, and none of the alleged misrepresentations bears any relationship to the sale or production of military fuels in the mid-20th century. There is simply no relationship between actions taken by the Companies’ predecessors in the 1940s and 1950s and the allegedly deceptive statements made by the Companies about climate change since 1980.
D.C. v. Exxon Mobil Corp.
,
The Court finds this reasoning persuasive. Here, the City’s Complaint does not take aim at Defendants’ production of fossil fuels during World War II or the Korean War for that matter. Instead, the Complaint takes issue with Defendants’ alleged campaign of deception and misrepresentation in the 1980s of the dangers of fossil fuel vis-à-vis the environment. The fact that Defendants acted under the federal government by operating and managing government-owned and/or government- funded petroleum production facilities is of no import. Unlike the claims in , this case is about Defendants’ alleged misrepresentations; not their work with or on behalf of the government that led to or contributed to fossil fuel emissions.
So too with Defendants’ more recent activities, involving the “extraction of gasoline or operation of energy infrastructure, either under federal regulations or via commercial relationships with the federal government.” Anne Arundel , 94 F.4th at 349. As discussed in more detail below, the Court agrees with the Fourth Circuit’s analysis that Defendants’ activities involving “fossil fuel production rather than concealment or misrepresentation of information about fossil fuel products,” cannot support the acting under element because “those activities fail to show the required relatedness,” and the defendants did “not argue the federal government required them to market or describe their products in a certain way.” Similarly, Defendants in this case do not argue that the government required them to market their products in any specific way. For the foregoing reasons, the Court agrees with the City that Defendants fail to satisfy the acting under element of federal officer removal.
B. Relation to Charged Conduct to Acting under Color of Federal Authority
The third element requires that the gravamen of the claim against Defendants
occur while they acted under color of federal authority. “[T]his requirement is distinct
from the ‘acting under’ requirement in the same way a bona fide federal officer could
not remove a trespass suit that occurred while he was taking out the garbage—there
must be a causal connection between the charged conduct and asserted official
authority.”
Ruppel
,
Defendants argue that the City’s claims are “for or relating to” acts Defendants
performed under color of office. NOR ¶ 128. To satisfy this element, assert
Defendants, there need only be a “connection or association with acts under federal
office.”
Id.
(quoting
Baker
,
The City counters that Defendants misread ’s statement that federal-
officer removal does not require “that the complained-of conduct
itself
was at the
behest of a federal agency.” Reply at 7 (quoting
Baker,
As for the other cases cited by Defendants, the City argues that they are
inapposite. In
Frye
, the Supreme Court analyzed whether the plaintiff’s claims were
subject to the Individuals with Disabilities Education Act’s administrative
exhaustion requirement, and in that context, “explained that ‘the gravamen of a
complaint’ was defined by the ‘conduct that violated’ the law, not by the ‘nature’ of a
plaintiff’s injuries.” Resp. at 7–8 (quoting
The Court agrees with the City that does not stand for the proposition
that federal officer removal may be based on a relation to a plaintiff’s injuries rather
than to the claims themselves. So, as stated above in relation to the City’s disclaimer,
the Court agrees with the City and out-of-Circuit cases addressing substantially
similar claims and arguments that the nexus element does not authorize Defendants
to rewrite the City’s claims into something they are not. Resp. at 9 (citing
Honolulu
I
,
C. Colorable Defense
The fourth and final element for federal officer removal is the existence of a
colorable defense. Defendants must establish that they have a “colorable” federal
defense to the City’s claims. This requirement “not only satisfies Article III
jurisdiction, [but] also encapsulates Congress’s desire to have federal defenses
litigated in federal forums.”
Ruppel
,
1. Government Contractor Defense
As the Seventh Circuit explained in , “[t]he government contractor
defense, developed in
Boyle v. United Technologies Corp.
, [
Defendants maintain that they produced oil and gas at the direction of the federal government and thus have a colorable argument that they are immune from liability for any alleged injuries resulting therefrom. NOR ¶ 142. , from Defendants’ perspective, demonstrates that the government contractor defense is applicable here. ¶ 143.
The City contends that, not only has it disclaimed injuries relating to the
military sales of specialized fuels, but also the federal contractor defense has nothing
to do with the Complaint. Resp. at 19; Reply at 17–18. For the same reasons discussed
above, the Court agrees that the federal contractor defense is unavailable to
Defendants based on the City’s disclaimer, and importantly, the fact that Defendants
do not allege that the government ordered their allegedly deceptive acts.
See Honolulu II
,
2. Remaining Defenses As for Defendants’ remaining alleged defenses, the City argues that these defenses are inapplicable as “they have nothing to do with the actions Defendants claim they took under federal direction.” Memo. Remand at 19. Again, the Court agrees. As the City correctly notes, the defenses do not arise from any official duties.
III. Request for Fees
The City requests that the Court award it fees and costs under 28 U.S.C.
§ 1447(c), due to Defendants’ “objectively baseless removal arguments” that have
been soundly rejected by myriad courts, including courts of appeal in eight different
circuits. Memo. Remand at 3, 30. Predictably, Defendants disagree, taking the
position that they raise “numerous meritorious grounds for removal.” Resp. at 29.
True, as the City points out, most of Defendants’ arguments and exhibits are recycled
and have been rejected by every out-of-Circuit court to consider them. Still, the Court
cannot say, in the face of
Baker
, that Defendants “lacked an objectively reasonable
basis for seeking removal.”
Martin v. Franklin Cap. Corp
.,
Conclusion
For the foregoing reasons, the Court grants the City’s Motion to Remand [66] in part and denies it in part. It grants it in part, in that the case is remanded and the Clerk’s Office is directed to remand this case to the Circuit Court of Cook County, Illinois immediately. It denies it in part, in that the Court declines to award the City fees and expenses.
Date: 5/16/2025
United States District Judge Franklin U. Valderrama
Notes
[1] Citations to the docket are indicated by “R.” followed by the docket number or filing name, and, where necessary, a page or paragraph citation.
[2] In considering a motion to remand, the Court “assumes the truth of the operative complaint’s
allegations at the time of removal, but may also consider facts set forth in the notice of
removal.”
Curry v. Boeing Co.
,
[3] Additionally, at oral argument held on February 5, 2025 (R. 112), counsel for the defense stated that the Court only needs to consider the federal officer removal, and need not consider removal pursuant to federal common law.
[4] This Order uses (cleaned up) to indicate that internal quotation marks, alterations, and citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations , 18 Journal of Appellate Practice and Process 143 (2017).